Touring the European Central Bank

For this exciting Q+ event, 12 students from educational science, biology, computer science, physics, political science, journalism, sociology, and economics toured the European Central Bank and attended an expert panel discussion. Mark Schäfer, who is currently working on his dissertation on monetary policy (e.g. on the effects of globalization on traditional monetary channels) in the Faculty of Law, Management and Economics at the JGU, provided us with background on the European Central Bank (ECB), with a focus its monetary policy. In a very lively and at times also controversial discussion, we learned about the aims and operational framework of the ECB, the implementation of monetary policy, and mechanisms of transmission. We also discussed the current challenges facing the ECB as well as criticisms of the institution’s policies, including zero or negative interest rates, cooperation with the finance ministers of the Eurozone (the so-called “Eurogroup”), and much more.

On Friday, May 24, 2019, we traveled early that morning by regional train to the ECB in Frankfurt, where a “Fridays for Future” protest had just come to an end. The security controls, which were already quite strict, were even stricter this morning and it took about a half an hour to even gain entrance to the architecturally futuristic and imposing building of the ECB. In the enormous foyer, Dr. Hans-Joachim Klöckers met us and guided us to the office and conference wing, passing through several more security checks. Dr. Klöckers has served as General Director for International and European Relations at the European Central Bank since March 2018. In his function, Klöckers is responsible for the activities of the ECB that impact the world economy as well as for elaborating the ECB’s positions in questions of European and international politics. He chairs the Committee on International Relations of the ECB and is also active in the European Union as an alternate member of the Economic and Financial Committee as well as the “Eurogroup.” From 2005–2018, Klöckers headed the ECB’s division for Economic Development, responsible for economic projections and country-based analyses. Before this, he headed the division of Monetary Policy.

Dr. Klöckers took three hours for us, and our discussions with him were very in-depth, critical, and at times even controversial. First, he spoke about his analysis that in a little less than a decade after the global financial crisis began (which led to the worst recession in the Euro zone since the Second World War), the Euro zone has now recovered economically: unemployment is down to single-digits in most countries of the Euro currency union, companies are recording high revenues and banks are again issuing lots of loans to companies and private households. Nevertheless, the ECB is sticking to its “expansive monetary policy,” implementing near-zero interest rates and making large-scale purchases of securities. The consequences of this politically contentious policy were discussed at length, with very active contributions from all in attendance. Topics of discussion included price stability, inflation and deflation, sustainable economic growth, stability in the financial markets, and employment policies, but also the North-South economic divide in Europe, the crises in Greece and Portugal, and the ECB’s involvement in the Eurogroup, as well as the impact of negative interest rates on European economies, companies, and households. It was an extremely interesting, (self-)critical and very political discussion that could have well gone on for another hour or two – there were just so many topics to discuss. But we also wanted to get in a tour of the building to view its extraordinary architecture. During our tour, we visited a conference room with booths for interpreters where European heads of state would meet (today, though, everyone speaks English). With this, a fascinating field trip to the ECB came to a close.

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